Oregon Securities Broker Charged with Investment Churning and Tax Evasion
PORTLAND, Ore.—A 13-count indictment was filed in federal court today charging James W. Millegan, 62, a former Oregon securities broker, with investment account churning and tax evasion.
Millegan, who currently resides in McMinnville, Oregon, owned and operated J.W. Millegan, Inc., a commission-based investment advisory business serving clients primarily located in the Portland and Salem, Oregon metropolitan areas.
According to the indictment, beginning in March 2012 and continuing until May 2017, Millegan is alleged to have churned the investment accounts of 12 different clients. Churning occurs when a securities broker engages in excessive buying and selling in a client’s account to generate commissions benefitting the broker with no reasonable expectation the client will benefit from the trading. When accounts are churned, clients are prevented from earning investment profits on the money they pay in excessive fees and commissions.
Millegan’s alleged actions generated more than $2.5 million in trading commissions and cost these 12 investors more than $4.3 million in estimated unrealized investment gains.
Additionally, between July 2006 and September 2016, Millegan is alleged to have willfully evaded payment of more than $3.3 million in personal income taxes. To conceal approximately $3.7 million in commissions from the IRS, Millegan allegedly transferred funds to hidden bank accounts and filed false financial statements.
This case was investigated by the FBI and IRS-Criminal Investigation and is being prosecuted by Seth D. Uram, Assistant U.S. Attorney for the District of Oregon.
An indictment is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.